The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee (FPTRC), Mr. Taiwo Oyedele, has revealed that only three per cent of informal sector operators in Nigeria have the financial capacity to pay taxes.
Oyedele made this known on Monday during the PwC Executive Summit held in Lagos, themed “The New Tax Era: What Nigeria’s Tax Reform Means to Individuals and Businesses.”
Citing analysis by the Committee, he explained that 97 per cent of informal sector players fall below the taxable threshold and have therefore been legally exempted from tax under the new regime.
“From our analysis, it is only the top three per cent of the informal sector that has the ability to pay. Therefore, in these reforms, we have legally exempted the bottom 97 per cent from paying taxes. Let them breathe. When they grow, they will have the capacity to pay,” Oyedele said.
He acknowledged that while such exemptions might encourage some businesses to understate their income, the new system is designed to detect under-declaration and enforce consequences for tax evasion.
“It’s hard to pay tax anywhere in the world. Nigerians are not bad people. The difference is the system,” he added. “If you go and lie and say your business is small when it is not, we will find out, and there shall be consequences.”
The FPTRC chair further noted that Nigeria’s tax framework is now more progressive, with all major taxes adjusted to reflect a fairer burden-sharing mechanism. He confirmed that the official gazette of the newly signed tax law is being finalized and will be released to the public soon.
The recently signed tax legislation, comprising four bills signed by President Bola Tinubu on June 26, will take effect from January 1, 2026.
Also speaking at the summit, Regional Senior Partner at PwC West Market Area, Mr. Sam Abu, emphasized the importance of collaboration in ensuring the success of the reforms.
“Policy alone won’t deliver. Real change requires partnership and commitment from the government, business leaders, and individuals in the private sector,” Abu said. “We must engage with the spirit of these reforms with sincerity, integrity, and optimism.”
He stressed the role of stakeholders in shaping a simplified and effective tax environment, reiterating PwC’s commitment to removing complexity, helping clients anticipate risks, and delivering tailored solutions.
Key Highlights of the New Tax Law Include:
• Exemption of individuals earning less than ₦800,000 annually from personal income tax
• Harmonisation of federal taxes
• Exclusive mandate to the Federal Inland Revenue Service (FIRS) as the sole collector of federal taxes
The summit marks a significant step in deepening public engagement on Nigeria’s evolving tax landscape, with a shared goal of fostering transparency, equity, and growth.
